ProMat C-Suite Interview: Josef Mentzer, President and CEO at Knapp

Q: What is your number one takeaway from ProMat 2019?

Josef Mentzer: It was immediately clear as we walked into this year’s Promat that the overall supply chain automation industry, from commodity products, to mechanization, robotics and software is quite healthy, both from a supplier and a customer perspective, and that’s great to see!

Certainly, the healthy economy and other factors are key drivers of an accelerating demand for automation and related products and services; lead times are increasing, and tier-two integrators are being acquired by new players and large conglomerates to gain a foothold and market share in the North American market. Many are expecting that these consolidations will deliver benefits to end users and synergies to suppliers. It’s not yet clear if this will be the case. We’ve seen these industry acquisitions before, and only time will tell. But I think the jury is still out on this one.

Q: What are the three key market trends from your perspective?

Josef Mentzer: The first one is a triple-header combination of a strong economy, labor scarcity and the growth of e-commerce. Combined with the change in consumer demand, many call this the ubiquitous “Amazon effect”, but this factor is driving the move to highly automated order fulfillment systems. However, these are different than previous automated systems. Today, they have to be intelligent; leveraging new technologies, highly connected, agile, scalable and flexible. That’s a far different expectation than even three years ago.

The second leading trend is the change in size of these highly automated solutions. The scope and scale are now being driven by the diversity of customer needs, sophisticated network planning, new technologies, (big data, artificial intelligence, etc.), and supply chain transformation strategies. Paradoxically in some ways, at KNAPP we are experiencing both a move to the highly efficient mega order fulfillment centers, an “order of magnitude” larger than previous designs. At the same time there is significant growth in highly responsive, hyper-local, or micro fulfillment centers.

The third major trend revolves around the role of big data, cloud computing, 5G, predictive modeling and analytics, IoT and Artificial Intelligence. There is absolutely no doubt that these enablers will drive major and fundamental change in our industry, as industrial sector leaders move rapidly to adopt and leverage these technologies – which will result in lower cost, new levels of transparency, real-time visibility and higher performance supply chains.

These technologies will not be confined to the supply chain but will be rapidly adopted by both supply and demand side – creating an emerging digital value chain – these are game changing technologies, and those that fail to understand and adopt them run the real risk of being left behind.

Q: How is KNAPP reacting to these trends?

Josef Mentzer: KNAPP is a very different type of company, and we are adept at understanding trends and future planning. There is a culture at KNAPP consistently invests significant resources in and fosters innovation. At the core of our business, we’re creators, not collectors or acquirers of technology; and the result is that we’re not so much reacting, as we are planning.

Fifteen years ago, we were developing the first shuttle technologies. Today KNAPP is delivering the latest shuttle technology, with around 40,000 shuttles installed worldwide. This year we announced the largest shuttle system order in North America with over 1000 shuttles. Four years ago, we were exhibiting the first production robot picking systems, working in conjunction with pocket sortation technology – and as new pocket sortation technology is being introduced KNAPP has already installed pocket sorters with over 1M pockets.

This year we received the MHI award for the Best IT Innovation; awarded for our redPILOT Control Tower software – with 47 sites installed or nearing completion – a year after introduction at MODEX 2018. This technology investment began at KNAPP 5 years ago, leveraging newly identified technologies at the time; from big data and cloud computing, to artificial intelligence.

Over the coming years you will begin to see more results from our innovation and development engine, as we begin to deploy solutions that meet emerging demands for robotics, vision systems, secure supply chain solutions, labor savings, sustainable systems, exceptional visibility and transparency. We are also focused on changing the relationship between automation providers and our customers, as we become partners in delivering real time decision support tools, exceptional outcomes and results across their digital value chain.

To learn more about Knapp, click here.